“Are You Willing to Drop All of the Criminal Stuff and Just Ask Shiller Some Questions in a Non-Hostile Way for the Purpose of Determining His True Beliefs re These Matters?”

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

Again, it is NOT research.  It is analytics.  Research is supported by testing a theory.  With analytics, you are making observations from data.  What you also left out is Shiller said you cannot make predictions with CAPE and that you still need to stay invested.

Shiller has not said what you are saying he has said.

He has said that investors should generally remain investing in stocks at all times. I say the same thing. That doesn’t mean that he doesn’t believe that risk is variable and that investors seeking to keep their risk profile stable must engage in market timing. Shiller has advocated market timing. He said that investor who failed to lower their stock allocation in 1996 would live to regret it within 10 years.

Shiller has never made a clear statement as to whether CAPE can be used to predict long-term returns. He has in many occasions suggested strongly that he believes that predictions are possible. On one occasion, he offered some vague words indicating that he may have changed his mind. The normal thing to do in such a circumstance is for everyone who works in this field to ask him for clarification on this point. Have you ever done this? Are you willing to drop all of the criminal stuff and just ask Shiller some questions in a non-hostile way for the purpose of determining his true beliefs re these matters?

You don’t want to hear what he has to say. That’s the problem. If we all hear what Shiller has to say, we will in not too much time be hearing what thousands of other people have to say. We will all be enjoying an amazing learning experience. That’s what I want. It is not what you want. Buy-and-Hold got there first and you feel that. so long as discussion of the last 40 years of peer-reviewed research is suppressed, Buy-and-Hold will remain dominant. A strategy that cannot survive open discussion is a gravely flawed strategy, in my sincere assesment.

Rob